Spending Review: London transport 'escapes major cuts'

Key transport investment in London will escape major cuts in the government's Spending Review, Chancellor George Osborne has announced.

Mr Osborne said Crossrail and key Tube line upgrades would go ahead.

But Transport for London (TfL) has had its funding from the Department of Transport cut by £2.2bn over the next four years.

The Labour Party called the cuts "a vicious attack on London and Londoners".

Len Duvall, Labour leader of the London Assembly group, said the Spending Review "will hit middle income earners in London and attacks the poorest".

London's Conservative Mayor Boris Johnson said: "I believe we have won the government commitment to London's infrastructure that the people of London need."

Mr Johnson also announced London's cycle hire scheme would be extended to east London in time for the Olympics.

The scheme was launched in central London in July.

The London mayor said he would not have to raise Tube fares more than his already stated 2% above inflation and free travel for under-18s would remain in place.

Based on the current Retail Price Index (RPI) of 5.1%, this would mean a 7% rise in fares from 2011.

He said the cuts in TfL's budget would be covered by a programme of £5bn efficiency savings already outlined by TfL and the mayor.

Games protected

These include £1bn savings outlined for Crossrail, cuts to the mayor's electric vehicles programme and descoping of Tube station upgrade projects.

The scrapping of the western extension of the congestion charge zone was also confirmed by Mr Johnson.

Green Party member of the London Assembly Darren Johnson said: "Scrapping the congestion charge will lose an additional £55m which could have helped the mayor introduce measures to reduce air pollution in London."

The re-commitment to Crossrail and Tube improvement is a vital signal that London is open for business and equipping itself for growthBaroness Jo Valentine, London First

Elsewhere, Mr Osborne also announced the London 2012 Olympic Games' budget would be protected.

The Metropolitan Police's budget will be affected by the 4% cut in Ministry of Justice spending on policing each year for the next four years.

However, Mr Osborne said counter-terrorism work would be "prioritised".

Meanwhile, cuts to the social housing budget and increased rents for new social housing tenants to around 80% of market rates "will disproportionately affect Londoners - especially those living in central London," Labour's Mr Duvall said.

Elsewhere, the chancellor announced free entry to museums and galleries would continue and plans to extend the Tate Modern and the British Museum would remain.

Responding to the news that Crossrail and key Tube line upgrades would go ahead, Dr Helen Hill from London Chamber of Commerce said: "Building Crossrail and completing the Tube upgrades will boost the capital's economy and keep London moving in the face of a rapidly growing population."

Baroness Jo Valentine, chief executive of London First, which represents major London firms, said: "The re-commitment to Crossrail and Tube improvement is a vital signal that London is open for business and equipping itself for growth."